The UK’ new Government – Coalition and Gambling
No-one can envy the job the UK’ new Prime Minister David Cameron has inherited from his predecessor Gordon Brown.
Previous Conservative governments have generally favoured business and wealth creation as a way to expand the economy and to enrich people’ lives. However, it is now becoming clear that Cameron has had to give a lot away to secure a deal with the Liberals. The first shock came on the FT Alphaville blog on 12 May 2010 which read:
“Capital gains tax (CGT) will be increased significantly in the UK for non-business assets, as part of a radical package of tax reforms agreed by the new Conservative-Liberal Democrat coalition government. The 18% tax rate on gains on non-business assets will be raised to close to the 40% higher rate of income tax, meeting a central plank of Lib Dem policy, say Tory insiders. There will be “generous exemptions” for profits related to business, to address concerns about the impact of the tax increase on entrepreneurs.”
It has also been reported that a survey of independent economists believe VAT will rise to 20% before the end of 2011. Inflation has also been rising. GBGC has previously discussed both of these factors and how assets purchased now will look cheap in the coming years.
From a Conservative Party perspective David Cameron has played a blinder in some respects. Faced with a yawning deficit that has to be filled he has formed a coalition with the Liberal Party who are more akin to the tax and spend policies of the previous Labour government than the Conservatives.
By forming a coalition with the Liberals who have imposed policy on the Conservatives, the budget deficit will be reduced and the Liberals will be blamed for the tax increases. Fine and dandy if you are a Conservative MP, lousy for those having to fund it – the taxpayer!
As we have always said, gambling customers can only spend what they have in their pockets and more taxes going to government means less for the UK’ punter to spend on gambling.